Workers Comp / Compensation Insurance or Exemption

In the previous article we discussed obtaining liability insurance to not only cover accidents that may occur but also to assist you in getting jobs. In this article I want to cover Workers Comp Insurance and how it can protect you and your customer and also how it can assist you in getting jobs.

Workers Comp is designed to cover your workers or employees in the event they are injured on the job. If one of your employees hurts their back picking up paint buckets or trips and breaks an arm workers compensation insurance will pay them until they recover and can work again. The advantages of workers comp for companies that have employees that may get injured on the job are obvious. If you are on someone’s property workers comp will insure that if your employee is injured your insurance will cover them and not the property owners policy. This is a big deal to most companies that you will work for.

The first thing you should do is go to your states worker compensation internet site and see what the requirements are. Some states force you to carry workers comp for your employees and some don’t. Some make you carry it your self and some allow for you to be exempted. In Florida for example, all construction related businesses must carry workers comp even if they only have one employee. However, in Florida, corporate officers and LLC owners can be exempted. (exemption must be applied for) If you are a sole proprietor or partnership you cannot get the exemption.

If you are not required to carry workers comp then you have to decide whether it will be beneficial to you. There are two things to consider. Number one. Do you want to be responsible for the injuries of your employees or do you want to be relieved of this responsibility via workers comp insurance. Number two. Will having workers comp help you get jobs. The answer is yes it will. The owners of most larger properties will not let you work on their property unless you show them that you have “liability insurance” to cover them if you damage something or injure someone and “workers comp” to cover your employees if they get hurt on the job. If you are a small corporation or LLC you can get the exemption card and that will suffice. In most cases, the extra income you can make from additional jobs will more than cover the extra cost of insurance.

If your company is required to have workers comp and you don’t carry it you can be fined by the state plus you will lose out on most large jobs. If you don’t have to have workers comp you will not be fined but you will lose out on the same jobs. The choice should be clear but the best thing to do is consider your options and make the decision that will both boost your bottom line and cover you from unnecessary liability.